NSE CUTS MARGIN IN STOCK LENDING BORROWING SCHEME

The NSE clearing corporation will not levy the value at risk (VaR) and extreme loss margin (ELM) on the lender. Stock lenders would continue to pay the marked-to-market margin as well as 25 per cent of the lending price. In case of early pay-in- of securities, the lender will not be levied any margins. In the case of reverse leg transaction (borrower returns shares to lender), the lender would not be charged any margin at all. The NSE clearing corporation will continue to charge VaR, ELM, mark to market and fixed percentage of lending price as margin from the borrower. The changes have been applicable from Dec. 22, 2008.